16 entries from June 2013

June 29, 2013

Here's our latest Reader Profile Update. Many of you asked for this type of post -- a progress report on where past Reader Profile readers are these days financially. I think you'll really enjoy this. (BTW, if you do enjoy it, you can submit your own update, hint, hint.) :)

Today's post is from Crystal, who claims she did a reader profile some years ago (though neither of us can find it). As such, she decided to do an "update" using the questions I normally ask for a profile. Here goes:

Please tell us a bit about yourself.

My name is Crystal, I'm 30 years old, and I live in Houston, TX with my husband, our two dogs, my younger sister who rents a room upstairs, and two of our friends that rent the guest bedroom downstairs. Yeah, it sounds like a boarding house, lol, but it all happened sort of by accident and has worked well for all of us so far. I've been a reader and commenter here on FMF since October 2009. In fact, FMF himself and a few of you readers were the ones that encouraged me to start my own site, Budgeting in the Fun Stuff.

I submitted a Reader Profile a couple of years ago, but a ton has changed since then. For example, I made the leap into self-employment in July 2011 and my husband joined me in January 2012. I wrote a pretty popular eBook in July 2012 and it has sold nearly 600 copies. I was also a speaker about self-employment at The Financial Blogger Conference last year.

We paid off our first house earlier this year and moved into our new home late last year, so we still have a mortgage and property taxes, but we have a paid off rent house too. The rental income from that house and our roommates covers our mortgage and both sets of property taxes plus a little extra.

Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).

I started Crystal For Hire in April 2011 when I started running blog advertising for others. I was also staff writing for about 13 sites a week at one point in late 2011. Between my freelancing and my blog income, I was able to quit my day job in July 2011.

My husband joined me to help in January 2012 since I was getting burned out with 80-100 hour work weeks and he wasn't really enjoying his time in the public school system as a teacher and librarian. Our business has had some big ups and some worrisome downs, but we have been holding to a steady income for about 2 years total. Here is our full financial breakdown:

Monthly Income

Online Income Average - $8000

Rental Income - $2300

Hobby Job Income (hubby is a varsity football and softball official and I am a Chick-Fil-A mascot kid cow) - $200-$1000

Total - About $10,500 in a Low Month

Expenses

Income Taxes – $2500

New-to-Us Car Fund – $500

Home Mortgage – $990

Home Insurance/Property Taxes/HOA – $750

Rent House Home Insurance/Property Taxes – $275

Health Insurance – $360

Life Insurance – $30

Car Insurance – $55

Electricity – $175

Water – $60

Natural Gas – $40

Gasoline – $150

Eating Out – $250

Groceries – $250

Sprint – $150

Cable/Internet (DSL) – $110

Medicines – $20

Toll Roads – $25

Housekeeping – $175 (average over the year)

Lawn – $80 (average over the year)

Miscellaneous – $200

Cash – $100

Total Expenses = $7245

Extra money is split up like this right now until our 2013 Roth IRA’s are taken care of:

Roth IRA’s – 80%

Rental Property Maintenance Fund – 10%

Vacation Account – 5%

Fun Money Accounts – 5%

When our Roth IRA's are fully funded, we'll be dividing that part up between a SEP IRA and more investments.

What are the current financial issues you're facing (saving, paying off debt, etc.)?

Not knowing how long we will continue being able to work from home is the hardest part of self-employment. Financially, we know that we are doing really well right now, but online blog advertising could dry up at any time.

We manage our income by moving everything from Paypal to a CapitalOne 360 blog income savings account (formerly ING Direct). Then we pay ourselves $4000 biweekly from that account automatically. $1250 of that is also automatically squirreled away for taxes, so we end up paying ourselves $2750 every two weeks to cover the rest of our monthly spending. Whatever is left after our bills are paid is divided up like I said above.

We have a $10,000 emergency fund, $15,000 padding in our blog income account, and side accounts for a new-to-us car, home maintenance, vacations, fun money for each of us, and for future investments (to eventually be used in Scottrade, to fund a SEP IRA, or to maybe buy another rental property). Our only debt is the $205,000 left on our current mortgage at 4%.

What would you do? Invest in stocks (we like stable, high dividend ones like J&J), pay off the current mortgage, buy a new rental property, or hide as much as possible in a SEP IRA?

What are your plans for the future (retire early, build your career, etc.)?

I used to make 30 year plans, but self-employment is a little less stable-feeling. So our current plan is to ride this horse until it bucks us. I love working from home for myself, so I think I could do this indefinitely. Even if blog advertising ever dies, I can continue staff writing and writing eBooks (working on my second one now). My husband seems to feel the same way but I sort of hope he finds something for himself that he likes even more since he still feels more like an employee than a co-owner. He needs his own thing that makes him happy. Maybe sports officiating at the college level or something like that. We'll see. Overall, our general plan is to become financially independent as soon as humanly possible just so we can choose what to do with our time from there. Currently, we are aiming for that by age 45-50.

Keep your expenses as low as you realistically can. The lower your monthly nut, the easier it is to cover. At the same time, find something that you absolutely adore to do and make a business of it. Self-motivation is a force of nature...it drives success more than I could ever imagine. We actually haven't followed all of our own advice, lol. Our expenses should be about $500 a month lower than they are now because of splurging. But we also like the time our splurges buy us and the entertainment value, so at least our eyes are wide open.

When I started reading and commenting on FMF in 2009, I was planning to work a cubicle job for a car dealership software company until I was 55 years old for $35,000-$40,000 a year. My husband planned on continue being a school librarian until he was 52 for about $48,000 a year before he could retire with a pension. Now we are both around 30, bring in about $125,000 a year, and just want even more control over our time. Between 2009 and now, we have pretty much changed everything about our lives. Time is priceless and we just hope we are spending ours as wisely as possible.

June 27, 2013

I like this chapter because there's relatively little advice out there about phone interviews. I thought this could serve as a reference for all those wondering how to make the most of the phone-related portions of a job search.

Phone calls are increasingly used by hiring companies as vehicles to recruit, screen, and interview. As the cost of travel increases, the pressure for companies to be more efficient and effective during their hiring process also increases. What does that mean for you? You need to be prepared to be as amazing on the phone as you are in a face-to-face meeting.

Phone etiquette: Once you are an employee of a company and attending conference calls or web conferences, you will periodically hear babies crying and dogs barking in the background of somebody’s home phone. Or a remote attendee forgets to mute and they scream at their children while the entire call is laughing. That’s okay once you are hired. We all make phone mistakes.

However, that’s not you right now. You are selling yourself as the BEST product for the hiring company to buy, regardless if the individual on the other end is a recruiter, HR person, assistant, or the hiring manager.

Solution

First, put yourself in the shoes of the caller. They are extremely busy, probably calling multiple candidates in the span of a couple of hours, days, or weeks, and they are responsible for concluding that call with an assessment about you. They probably have some specific questions in front of them, are taking notes, and are only thinking about one thing: Is this the best candidate for the position we are discussing?

Second, pretend you are in front of them and this needs to be your best moment. There are a number of key characteristics in common between phone interviews and face-to-face interviews:

You want to understand them clearly and you want to be heard clearly.

You want to answer their questions concisely.

You want to be prepared in advance of the call.

There is a limited timeframe to cover a lot of information.

There are some real advantages of a phone meeting AND some real disadvantages:

Advantages of Phone Meetings:

1. You get to cheat! YES, you can and should have multiple sheets of paper in front of you (don’t try to navigate on a PC while talking). Minimally, have:

your résumé

the job description (with any notes or questions you have)

page prints of some key webpages for the company (About, Divisions, People, Values)

top Interview questions and your 3 bullet-point answers per question

top questions you want to ask them

Paper and pen to write down the questions they are asking and to take notes of their comments, insights, and answers. You will need these for the thank you note you will write immediately following!

Spread all of the above out and mark each one clearly so you can find it in the moment.

2. As a result of “cheating,” you should be able to have great answers and express your interest in the position.

Disadvantages of Phone Meetings:

1. You will have a tendency to ramble. No, you will ramble. You are nervous, you want to sell them on so many points, and you have no clues on how you are doing. See the first TRICK below.

2. It’s harder to understand the question. There are a variety of reasons this can occur: English as a second language for one or both of you, the interviewer talks quickly, OR the question was just unclear. See the second TRICK below.

3. You can’t read their non-verbal body language. You don’t know if they are smiling or rolling their eyes. They can’t see your hand motions or eye contact. See the third TRICK below.

4. Time will run out and you may not have said all you wanted to share. See the fourth TRICK below.

Tricks

1 “The Law of 3s:” Say no more than 3 things and stop talking. Repeat: Say no more than 3 things and SHUT UP. This will not only prevent you from rambling, but it gives time for the interviewer to write and think. Learn how to pause. Take a breath. If the interviewer wants more, he or she will ask. If you are concerned it was too brief (if you just said 3 words), then you can ask, “Would you like me to elaborate on any of the points?”

2 Ask for Clarification: If you did not understand the question, then ask them to repeat it. This is not a sign of weakness and it’s important that you answer the right question. Just try not to do this on every question. Two ways to ask: “Can you repeat the question please?” or “Can you expand on the question so I am clear on what you are looking for?”

3 Stand Up and Smile! : Even if you can’t see them and they can’t see you (unless it is a web conference), stand up when on the phone. Your voice will project better and you will sound more confident. If you have a headset, use your hands, too. Nobody is seeing you, but if it helps you to be in a presentation mode, then do it. I do! Did you know that smiles come through the phone? Yes, when you make a statement like, “Ms. Miller, I believe I am the best candidate for your position because I’m _____, ____ and ____,” there is a different tonal inflection if you have a smile versus without. They will hear a more up-beat, positive candidate if you are smiling.

4 Have the Last Word: Time will run out. Toward the end, most interviewers may ask if you have any questions. Naturally, you will have some excellent questions pre-prepared basedon your research. However, that should not be the end. If the interviewer then says, “Well, Mr. Jones, thank you very much for your time and we will be in touch,” then you want to interject. “Ms. Miller, thank you very much for your time. I would like to reinforce that I am passionate about this position and believe I have the skills to be successful in this role. Do you believe I will go to the next step in the hiring process?”

1. You have shared your high interest in this role. Remember, hiring managers want to hire candidates who really want their position.

2. You have “gone for the close,” a sales term that means you asked for their business. In this case, you asked if you could continue this hiring process.

5 Block Prep and Travel Time: Block 30 minutes before the phone interview and 30 minutes after the phone interview in your calendar. A common excuse I hear for being 5 minutes late for a phone interview is, “Sorry, I was on another call.” Well, then you should not have accepted one of the times since they were back to back.

6 Script Your Outbound Calls: The nice part about the phone is that they can’t see you reading from your “script.” So write your script. Regardless of whether the person picks up the phone or if you get their voicemail, you will be clear, concise, and action-oriented. Now, write out the email that will follow this phone call so that the minute you hang up from the phone, you can push “send” or make minor changes based on the results of the phone conversation.

7 Leave Great Voicemails: It will be rare that you get the person on the phone, so look at voicemail as a great opportunity. Some rules:

Clarity: Pick up your handset, avoid ear buds, and don’t be driving in a car or calling from airports or noisy areas.

Pace: Speak slowly and articulate more than you would in normal conversation.

Engaging First Sentences: “Hello, this is Jane Miller. Doug, you and I met at an industry event six months ago and I’m calling to ask for your help. I’d like to apply for the marketing manager position at your company and am requesting your help in navigating my way to the hiring manager.”

Brevity: This voicemail is not replacing an email you will follow up with. It is an introduction to an email you will send. Do not assume the listener is writing anything down, either. They could be listening while in their car or at the airport.

Call to Action and Close: Close every voicemail with the next step that YOU’RE going to take. I have received so many calls that end with, “Dana, please call me back at xxx-xxx-xxxx so we can discuss.” Or, worse: “Let’s discuss.” I call those “plops.” You just plopped the follow-through on the middle of the virtual table, and nothing will happen as a result. Here are some recommendations:

Doug, I will send you a follow-up email today with this request and my credentials attached. It will be in a format ready for you to forward to the hiring manager.

Doug, if you would like to reach me by phone, my number is <slowly> XXX-XXX-XXXX. Again, it’s Jane Miller at XXX-XXX-XXXX.

Thank you very much, in advance, Doug.

If an Administrative Assistant answers, ask them to put you into their boss’s voicemail instead of having them take a message.

8 Have Professional Phone Behavior: Change your voicemail message to say “Hello, this is James Smith and I’m sorry I missed your call. Please leave a message and phone number and I will respond as soon as possible.” Check your voicemails often and play them in their entirety prior to calling the person back.

When answering your phone “live,” unless you are sure you know the call is not a job search-related call, always answer, “Hello, this is James.” They will appreciate your professionalism.

9 Be Ready for Video: Have interview-appropriate attire on above the waist. See Chapter 17 on interview attire. Even though the phone call arranger says “phone meeting,” more and more of them are becoming video phone calls. If they use Skype, that is an indicator that it will be video. However, even if you are sent a link to a conference call, that, too, may end up on video. Better to be over-prepared and ready to be seen.

Mistakes

Mistake #1: Being late. Yes, it happens all the time, even for a phone interview. “Sorry, there was traffic, my last call went long,” or some other excuse.

Mistake #2: Missing the call entirely because of time-zone confusion. It is your job to clarify the time zone in advance. Figure that out.

June 25, 2013

Here's our latest Reader Profile Update. Many of you asked for this type of post -- a progress report on where past Reader Profile readers are these days financially. I think you'll really enjoy this. (BTW, if you do enjoy it, you can submit your own update, hint, hint.) :)

I enjoyed the participation and feedback we got from our reader profile in April of 2012, and I thought it would be fun to give a little update on the progress we have continued to make. Obviously, we have aged another year, and are both now 28. Over the past year, we’ve kept up our good savings and investing habits to keep moving in a positive direction. When you combine that with the bull market we’ve continued to experience over the past year, the progress we’ve been able to make is much more than I forecasted a year ago. We still have no family or pets other than ourselves, and have no plans for any additions in the near future.

First, here’s a snapshot of our net worth.

Assets:

401(k)s – $226,000

Roth IRAs - $69,000

Taxable Investment Accounts - $13,000

Home - $135,000

Rental #1 - $102,000

Rental #2 - $140,000

Cash - $100,000

HSAs - $9,000

Other Assets - $30,000 (cars, present pension value, etc.)

Total Assets - $824,000

Liabilities:

Home Mortgage - $88,000

Rental #1 Mortgage - $68,000

Rental #2 Mortgage - $100,000

Total Liabilities - $256,000

Total Net Worth - $568,000

Our income is up moderately at work, where we bring in a combined $140,000 in base pay. We now have additional revenue streams from the rentals, which total about $24,000 a year. However, after expenses, only about 35-40% (roughly) of that revenue amount ends up as an addition to our net worth at the end of the year, but I expect this to increase as principal is paid down and rents are increased.

We have continued to max out our retirement accounts, and combining that with company contributions and market conditions, we have been able to increase their balances fairly significantly. Along with this, we have expanded our rental property holdings to include another single family home, which we have just finished getting “rental ready” and will likely have occupied by the time this posts. We are currently passively looking for additional property, but will only pounce on the deal if the right one presents itself. Our strategy is to purchase mildly distressed foreclosures which can give us instant sweat equity with some TLC. We continue and will likely continue to hold a large cash balance to take advantage of these deals which often require cash offers, since the instant 10-20+% return they can earn is far superior to me than putting it in a “safe” asset earning only a few percentage points. This may be a bit on the risky side, but I feel at this point in our life we are well positioned to take some calculated risks like this which have the potential to provide significant returns.

When our profile was originally posted, several readers mentioned that we ought to review our asset protection strategy, primarily in regards to insurance, as it seemed to be the one thing missing. I’m happy to report that we have added an umbrella policy to our insurance package. When you combine this with the fact that our rental properties are held within an LLC, I believe we have taken the appropriate steps to protect our assets from any claims. As our wealth and exposure to claims increase, we will continue to review and monitor our protection strategy and make the necessary adjustments.

One other comment, which I will admit got me flustered, was that we must have inherited some money. This is just not the case. As I mentioned at the start of the profile, neither one of us had any school debt due to our generous parents and scholarships. Other than that, it was all us. The “windfalls” we have gotten along the way that boosted us past where we would normally be with our salary alone were primarily due to educated investing and hard work. We both took extended out of office assignments at work, which can allow you to save additional money if you handle the situation correctly since all of your day to day costs are typically paid for by the company. We also received a modest bonus one year at work which we saved in its entirety, but when this is divided amongst all of our years of employment it was almost certainly a smaller bonus than many earn yearly. Other than this, it has just been saving a considerable portion of our salary, making every dollar count, and putting that money to work for us.

I expect we will continue to make good progress. I realize we have been the beneficiaries of a large run up in the stock market, along with a recent modest increase in property values, so I expect our gains in wealth on a year over year basis will not always be as dramatic as they have been in the past few years. While the markets may not continue the bull runs, with our comfortable emergency fund and diversified assets, I expect we will be able to reach our goal of financial independence in a reasonable amount of time, though we need to not lose focus and continue our habits. Our primary goal for the next few years will be to continue building cash-flowing assets in addition to our retirement funds to give us some career flexibility, and also take a little time to enjoy ourselves here and there. I thank everyone for the feedback and hope this update is beneficial to you all!

June 22, 2013

Money magazine asked readers of their June issue if they will spend more on vacations this year. The results:

29% will spend less this year

27% will spend a little more

25% will spend about the same as last year

19% will spend a lot more

My answer depends on how you define "this year". If you literally mean the 2013 calendar year, then we will be spending a lot more versus 2012. We took a bigger cruise this year than last year and took my parents as well. In addition, we're planning a September trip to Disney (tentative) which is incremental to 2012.

If by "this year" they mean the summer months of 2013 (or even the rest of 2013 -- May through December), then I'd say we will spend a little more since we have the potential Disney added to the agenda.

We are consciously spending more on vacations since our kids will end of their high school careers in the next 2-3 years. Once they get into college, everyone will likely go his/her own way, so we're trying to take as many family vacations as possible while we're still together as a group.

I've written a lot about networking and have even detailed my personal networking plan. As they say, the time to develop a network is BEFORE you need it, so let this piece serve as a reminder of the importance of networking.

Elizabeth worked with Brad over 10 years ago and they have not kept in contact. Until last week. Brad is recently unemployed and contacted Elizabeth via Facebook with the following message:

Hey, Elizabeth, how are ya? I was just let go from my company and would like to pick your brain about job opportunities out there. Let’s do coffee. What time works for you? Regards, Brad

Pamela and Sharon, both job seekers, went to an evening networking event hosted by the local Chamber of Commerce. The event started at 6:00 p.m., but they got there at about 7:00 p.m. Together, they got a drink, found an empty table to stand at, and talked about “life.” Sharon met one interesting person in the drink line and Pamela bumped into an ex-peer from a prior company as she was getting her coat to leave. On the way home, they both agreed it was a terrible waste of their time and they would have much more luck applying to jobs online at home.

Charles is 52 years old, new to Chicago, and doesn’t know anybody. But he loves the city and is seeking a role as an architect. He’s spending all day either on his computer or calling the largest architecture firms in Chicago, trying to reach a senior person who will talk to him. After six months, he is frustrated and insecure about his ability to get a job. His money is running out.

Ryan, fresh out of MBA School, is blasting his LinkedIn contacts with: “I am looking for a job. It will be great if you can advise me on my job research. Regards, Ryan.”

All of the above have one thing in common. They have not learned how to network for career success. They don’t appreciate the need for preparation, professionalism, and a process. I have been told I am maniacal in my networking process, but I am also labeled the “queen of networking.” So here is the Cut the Crap solution for networking for a job:

Solution

#1: Have a Networking Plan

Your mission: to identify people who can help you learn, help point you to resources, or introduce you to someone else. As a result of your work in Chapter 3, Setting a Goal, you now have a clear bulls eye for your job search. This plan will focus your networking efforts on the right people or events based on your goal.

Steps for building a great Networking Plan:

A. List People You Know. Look at your Outlook Contacts, your stacks of business cards, recent email communications, and put them in the following categories:

Current and Past Peers

Current and Past Managers or Mentors

Peers or Friends in Other Organizations

Contacts from Industry Organizations

Customers, Partners, and Competitors

B. Now, you want to list New People to Contact. These people should help fill in the gaps of your prior list or those with complementary competencies and experiences. If you don’tknow their specific name, put the title or position type (venture capitalist, industry spokesperson, etc.). Take your Cut the Crap (CTC) Search Profile work from Chapter 3 and be sure to add a blank row for people inside the companies you want to work for. You need to meet people who work in the organization you’re interested in. Meeting them does not mean that they will hand you jobs. Hopefully, they will give you some insight and advice and possibly offer to meet with you.

C. Finally, and since networking is a two-way connection, list what you can offer in return. How can you show appreciation—make introductions to others, give recommendations or feedback, volunteer help, etc.?

D. How to find and connect with your new network

1. Face-to-Face Networking:

People need to get to know you, trust you, like you, and believe that you do what you say you are going to do. It is not always easy, comfortable, or interesting to meet total strangers. You will make some mistakes and feel awkward or silly at times. Dive in. We all do. With practice, you may even get to enjoy it!

Industry, charity, service associations, and events. Seek out industry events that tie to your career goals and participate in the following:

Special Interest Groups, or SIGs—committees to accomplish the association’s objectives on a variety of levels

Annual or quarterly industry awards

Live monthly or quarterly events

Dinner meetings and presentations

Online Community Forums—virtual communities focused on specific topics where members can post and respond to questions, share insights, and communicate and collaborate with other members beyond face-to-face events.

Volunteer. Local organizations have great community leaders involved on their boards, and there is no better way to meet them and spend time giving back to your community. If you are unemployed and have time to give back, then you can also meet influential mentors simultaneously.

Create your own mentor group. Bring people together once a month with the goal of helping one another.

Job search, employment, and job Fairs. Look in your newspaper or online for the local events hosted in your area.

Business Journals. You can find multiple opportunities by searching in your city’s Business Journal (abcj.com for the Journal in or near your city), local newspaper, or online.

2 Online Networking—Social Media Networking

This form of networking with total strangers is more difficult, takes longer, and the type of advice you receive will be different. But definitely add it to your networking plan. It’s harder for someone to get to know you and there is a lot of “noise” from other job seekers. Use social media strategically and professionally. Just because you are networking onlinedoes not give you permission to use slang, text-speak, have typos, poor grammar, or just a plain old poorly written communication.

Some of my preferred methods are:

Join Discussions within Groups on LinkedIn that are relevant to your Job Search Goals. There are many groups for job seekers, in general, down to industry-specific job seekers, and so much more. You can join groups of the companies you are targeting. LinkedIn Groups are a great place to do research too, but some top contributors and thought leaders will also stand out. You can contribute to discussions or ask a thoughtful question and get help. If some professionals appear eager to help, it is appropriate to ask if you can have a 15 minute phone conversation with them.

Assure your LinkedIn profile is at 100%. There are many articles and tutorials about how to maximize LinkedIn, overall, and there are many ways to job search even if you are still with a company. If you are unemployed, make it very clear on your profile that you are searching for your next career move AND “here is what I am searching for.”

TweetChat helps put your blinders onto the Twitter-sphere while you monitor and chat about one topic. By using hash tags, you can identify specific topics and TweetChat will connect you with people talking about similar things.

Some of your Facebook contacts are probably good advisors for your job search. Send them a personal note, giving them as much information as possible so they can help you.

#2: Ask for help with a purpose

Get over the guilt, the shyness, and the embarrassment of asking for help in your job search. Change the way you ask for help as well. Once you have a clear purpose, you will use your wellrehearsed “pitch” when at group networking events, meeting strangers, reaching out to friends and family, and in more formal networking meetings.

Be proud of your job search goal you completed in Chapter 3. On the other hand, your embarrassment and guilt comes across as lacking confidence. Diana secured a meeting with Frank for help on her job search, needing help with introduction to some executives. She came to Frank’s office door and didn’t knock or let him know she was there. They lost 5 minutes since Frank just kept working, unaware Diana was on time. Then, Diana’s very first words were, “I’m so sorry, Frank, I know you are very busy and don’t have time to meet with me.” Diana continued with, “I won’t take much of your time and if you can’t help me I understand.”

What is Frank’s first impression? “Hmm…she might be afraid of collaborating in a business environment, she is lacking confidence, and we just lost 5 minutes of our 30 minutes for her apologies.” Harsh, eh? Well, Frank will never tell Diana any of that, and he’ll be cordial. However, he won’t become a raving fan of Diana’s going forward.

Have a clear job search goal and be excited about it! The meeting continued and Frank asked, “So, Diana, what are you looking for?” (Frank is implying, “How can I help?”) Diana responded, “Well, I’m not sure, which is why I’m here.” Not good. Your network is ideally suited to help you reach a goal, not a career counselor. Yes, there are a few who may enjoy this level of discussion, but during my 30+ years in Fortune 500 companies, I learned that most networking is best when the job seeker has narrowed this down herself. There are many resources, both online and in books, to help you assess what types of jobs are right for you. Do your research before you network!

#3: Rehearse and prepare yourself for great networking

In front of a mirror or in your mind, practice what you will do and say from the minute you enter through your closing summary of the meeting—from the strong handshake and eye contact, the first words out of your mouth, all the way to the closing handshake and smile. If Diana had done this, her valuable 30 minutes with Frank would have resulted in an entirely different set of “help.”

Are you prepared to network? Here is a short checklist:

Pad and pen for note-taking…don’t EVER go to a meeting without it…and use it!

Copies of your résumé, samples of your work.

Business cards—yes, even a personal business card with your contact information and social media links.

The right attire. When in doubt, err on the formal side. No perfume, cologne, cigarette smoke, bad breath, or body odor.

If via phone, do you have a quiet environment, battery power for your cell, etc.?

A watch. If you asked for 30 minutes, it’s your duty to watch the clock and end on time.

#4: Follow up immediately with every network contact

This is where bad form gets ugly. Networking or “connecting” is the process of building up two-way relationships for the long term. When a job seeker either doesn’t follow up multiple times or disappears, it’s called “using.”

Rules for following up on networking contacts:

At the end of every day or beginning of the next day, thank everyone who helped you. If you had a network meeting, thank that person and thank whoever introduced you to them.

A thank you email should be done within 24 hours OR send a handwritten note. Include some insight about the meeting (from the notes you took!) and have a next step, such as, “I will keep you posted about my progress,” or, “I will ask for more time with you as soon as I have…”

All people who have helped you want to know how your job search is going. Consider them part of your advisory board or team and keep them updated at least once per month. They will be more inclined to continue helping you.

When you meet an interesting, relevant, and helpful person during your networking journey, here are some recommendations on how to follow up. NOTE: Use your best judgment so you are not perceived as annoying.

1) Bing or search their name—you can find additional information to help you with reasons to connect.

2) Write a formal email within 48 hours, indicating that you enjoyed meeting them, and suggest a 15-minute phone call or meeting, providing your purpose. If they prefer a face-to-face meeting, you would be happy to come to their office or a convenient location. Always show interest in who they are and what they do.

3) Send a LinkedIn invitation, including a note that you enjoyed meeting at the event where you met.

4) Follow the person on Twitter. This can provide real time data to improve the content of your communication.

5) Enter the information into your Outlook Contacts or other contact management system. In the notes section of the contact, write the date and location you met, as well as any notes of what you discussed.

#5: Mingle at Networking Events

First, set a goal for how many quality people you want to meet at the event. By quality I mean that you identified and had a conversation with individuals who are connected to the space you want to be in, professionally. Are they working in your industry, your field or function, or in one of your target companies? Quality also means that you had a conversation with them, captured their contact information (business card or you wrote it down on the notepad you are carrying), AND you asked them if you could follow up with them after the event.

Second, get to the event ridiculously early. Traffic happens every day, work or family issues crop up, etc. So aim to be in the parking lot 15 minutes before the start time and be one of the first, if not the first, to check in. Talk to the hosts of the event, too. Association staff often know a lot of people in the community, and they can give you advice about other networking events that are coming up.

Third, separate from any friends you know at the event. Simply be honest. “I don’t mean to be rude and would love to talk to you, but I’m here to meet total strangers who can help me win my dream job.”

Fourth, walk up to total strangers. They may be there by themselves, too, or standing among a group of people. Either way, smile, say, “Hello, my name is Harry, what is yours?” There are many good ice-breakers, such as, “What brings you to this event?” or, “What company do you work for?”

Here are some networking “starters” to help you avoid, “How about that rain out there, eh?”

a. “How did you get your current position?”

i What was the key to success?

ii How would you change your search process next time? Why do you think you won the position over multiple candidates?

iii One key piece of advice you have for me is…?

B. “How are you maintaining your network?”

i Do you keep them all organized? How?

ii Are you good at following up and staying in touch with people?

iii What will you change as a result of this conference/ meeting?

C. “Why did you attend this <subject> conference or meeting?”

i Do you have a personal goal you can share with me?

ii Can I share mine with you?

iii How can we help each other reach our goals?

D. “Do you love what you are doing?”

i What do you do?

ii What is the best part about it?

iii How did (or will) you match your passion with your day-to-day job? Any advice for me?

Tricks

1 Get into a rhythm or pattern every time you meet someone new, either face-to-face, via phone, or online.

Capture their information in a contact.

Put a date in your calendar (or task for those advanced Microsoft Outlook users!) to follow up with them.

Put another date in your calendar to follow up with them again.

Send them a thank you note within 48 hours.

Send other thank you notes if someone else connected you to this person (or an association event director, letting them know that their event was fruitful for you).

2 Color-code your Outlook contacts by event or type of contact. You may even just have a “green” category labeled “Job Search Network.” Then, when you land in a job, you havea high-quality database to send out a thank you note to and announce your good news. Most importantly, you get to offer any help back to them at any time.

Mistakes

Mistake #1: Dominating the conversation with your agenda. You are there to listen and learn and make an initial first impression so you can follow up with some key individuals the next day. Naturally, if they ask, “What kind of position are you looking for?” then you have your well-prepared, short version all ready. Say 3 short things then stop talking.

Mistake #2: Don’t ask them to email you. You are the product that you are selling and you need to drive the job search process, even when networking. Take accountability and use phrases like, “May I send you an email proposing some times for us to talk again?”

Mistake #3: Not reading body language. Non-verbal cues are critical for you to observe and understand. If three people are at a networking event, looking like they are in a heated debate, they are. Do not walk up and say, “Hi, I’m Sally.” Additionally, if someone is not engaging with you, then politely say, “It was a pleasure meeting you and enjoy your evening.” Or ask them if you can follow up with them at another time after the event.

Mistake #4: Not moving around to various people at a networking event. Although one person may seem to be the ultimate network “catch” and they are being very helpful right there, try to move around the room during the event as much as possible. Find that fine balance between having a good conversation to open up a new relationship versus actually having that job search conversation right there. Maximize the networking event opportunity.

Mistake #5: Not dressed the part. Some networking events are business attire or business casual. However, since you are the job seeker, you need to be sure you are on the formal side. When in doubt, dress formally. OR call the association or event coordinator and ask them what would be appropriate. First impressions do count, so I prefer you look like a great candidate than be underdressed.

Mistake #6: Bugging or annoying your network contact after meeting them. Use your best judgment by putting yourself in their shoes. At an event, don’t follow someone around or dominate their time. When contacting someone via email or phone, use the “Law of 3s:” If you contact someone 3 times and they do not respond, then you should stop. Wait a few weeks and try one more alternative approach.

Mistake #7: Giving your special network contact’s name out to friends or other job seekers. If you make a connection and that contact is helpful, that is not permission to give their name out to others. Protect your black book. If you want to make an introduction, contact your network and ask for permission. Wait for an answer. If there is no answer, assume “no.”

Just to be clear, the data is from "IRS' estate returns computed during 2007-2009 for those decedents who were under 70, married at the time of their deaths and had a gross estate of $2M or more." Just so we're all on the same page.

June 15, 2013

A few weeks ago the people at Sumo Lounge contacted me. They wanted to know if I would like a free Sumo Emperor chair to review. Having done a review of a Sumo product previously, knowing my kids like them (the old one is currently in my daughter's bedroom), and being a sucker for anything "free" I said "Sure!" They shipped one to me a couple weeks after that.

The product arrived in a huge box. We opened it up, cut away the plastic wrap (that serves both as protection as well as a shrinking mechanism), and the thing started to expand (we knew it would since we had another one, so we opened it up in our living room where there was plenty of space.) When it was all out of the box, we had a 55" x 25" bean bag chair in the middle of our living room!

Now that we've had it a few weeks, I'll give you what I see as the pros and cons of the Sumo Emperor:

What I Like

Good size. Not as humongous as the last one we got.

Looks decent. This one has some styling that makes it a viable alternative for a living room. The previous model was simply a huge bean bag chair.

Color. It only comes in red. BRIGHT red. If you really wanted this in your living room, it would need to be another color.

Size. One man's "just right " is another man's "too big." It's a bit big for our needs.

Overall, I say this product is best used in a good-sized entertainment/media room. It would have to be a high-end one given the price of this product, but to some people, $400 for a chair is nothing. To me, it's a bit pricey.

Anyone else out there ever tried a Sumo product? What did you think of it?

Sam Anderson was interviewing for the job of his dreams. He researched the company, had a brother-in-law in another division of the company who could be a reference, and was confident in his sales skills. When Jane, the interviewer, asked, “If I interviewed other people you have worked with, what would they say are your strengths?” he froze. He began thinking about specific people he worked with and what they might say. Then he thought about a prior manager and what he would say. Pretty soon, he was all over the place with his answer, sharing random strengths that had no connection or story. What happened? Well, the question was just another version of “tell me about your strengths.” The interviewer simply worded it differently. And Sam wasn’t prepared.

How about this interview request: “Tell me about yourself.” Have you rehearsed a short three-sentence version that is compelling to an interviewer?

The state of most candidates’ interview performance is pathetic. It IS a performance and there is no excuse for poor interview answers for 80% of the questions you will be asked. It is remarkable that the most frequently asked questions are available on the web, yet candidates fumble their way through them. Even more remarkable is that candidates who do prepare do so right before the interview. You can do this now, without having anyinterviews pending!

This chapter focuses on the interview preparation you do WELL BEFORE applying for jobs. Do this work very well ONCE, then you can review, refine, and rehearse it before an interview later.

You need to shatter all that you believe about interviews and restart. There are no secrets.

Success requires good old-fashioned preparation and practice. And the more nervous you are, the more you need to prepare.

First, let’s bust some myths:

1. The Myth: The interviewer really cares about what I say…the content.

The Truth: Sometimes. With certain questions, such as your strengths and weaknesses, yes, they want to learn. But they are also looking for your ability to articulate ideas, start a thought then stop a thought, and simply observing if your speaking style is clear and articulate.

2. The Myth: I don’t want to sound scripted.

The Truth: You won’t. You will still use tone and inflection to say the words. You will be morerelaxed since you know the content. You will sound self-aware, confident, and thoughtful.

3. The Myth: I should wait to see what they ask then think about it during the interview so Ican tailor my answer to the hiring manager.

The Truth: Complicated and unnecessary. Your skills, experiences, strengths, weaknesses, and more are already fixed. You will still be able to tailor messages to the specific interviewer, but that will be accomplished by adding to the answers you prepare during the interview.

4. The Myth: Interviews are all about the interviewer’s questions, not the questions I askthem.

The Truth: Often the hiring decision is made based on the questions YOU ask and the discussion that follows those questions. So you need to prepare your questions, as well as the answers, well prior to the interview. Not the night before!

Solution: Create two separate documents well in advance of any interviews

Following “listening,” a huge part of answering interview questions well is to understand why the interviewer is asking this question. Once you put yourself in their shoes and understand their intent, you will be able to provide answers that are truthful yet formulated in such a way that you perform well throughout the hour.

The questions you ask in an interview can help you OR knock you out of the running.

Joseph had an hour-long interview at 8:00 a.m. with the hiring manager, Susan, for a position he really wanted. He did some research on the company, reread the job description, and brushed up on his top strengths and weaknesses. He was on time and didwell during the interview. Until the last 15 minutes. Susan asked, “Well, Joseph, what questions do you have for me?”

Joseph displayed “crap” in the form of mistakes that sabotaged his odds of winning this job.

Mistake #1: He didn’t have any questions prepared.

Solution #1: Prepare your questions, write them down, and bring the piece of paper in with you to the interview.

Mistake #2: Joseph asked, “What is the starting salary?”

Solution #2: Never ever, ever, ever talk salary, even in ranges. Your mission is to get an offer in hand. Once you do, you can ask questions and possibly negotiate. Not before. Not to the human resources (HR) person, a recruiter, or to any interviewer.

Mistake #3: “Is there a training program or structured on-boarding process?”

Solution #3: Think about the story or perception the interviewer is creating with your questions. Put yourself in their shoes. In this case, they may be thinking, “Wow, he needs handholding and may be too high-maintenance for me. I need someone who knows how to do this.” If a training program is mentioned in the job description or on the company website, then it is appropriate to ask for more insights about the structure, length, etc.

Mistake #4: “What does your division or company do?”

Solution #4: It is still shocking how many job seekers ask this question. With the web, calling people you know, social media, and many other resources, there is no excuse like, “I didn’t have time.” By the way, in the U.S., one of my favorite resources (that I have referred hundreds of job seekers to) is your local city’s Business Journal, both their online resources and receiving their publication. Look up American City Business Journals at acbj.com.

The keys to a great question from you to the interviewer are:

How can I show a strength through the question?

How can I convey something to the interviewer that we haven’t already covered but it’s important for him/her to know about me?

How can I avoid inadvertently showing a softness in a skill they need strength in?

Is my question relevant to the interview? You are there for a purpose. Your questions should focus on helping you understand the job or the team you will be joining. Examples: Don’t ask, “What are Boeing’s top challenges as a company?” when you are interviewing for an accounting job in a certain department under a hiring manager who is looking for a very specific set of skills. You’re burning up valuable time, you can read those online or in the papers, and the question is not relevant to the job unless you are interviewing for their CEO or CFO position.

What are the best questions to ask in an interview?

There are many, but I’ll share my favorites.

I’m very self-motivated. How will you measure my success in this position after one full year?

The first 30 days are very important for me to meet as many team members as possible. How will you recommend I do that?

What are the top 3 skills or experiences you are looking for that may not be mentioned in the job description?

Of all of the people who have worked for you, what are the characteristics of those who have stood out as great performers?

I have to admit I’m a perfectionist in some areas. What are the aspects of this position that absolutely require precision and attention to detail?

What do you find most creative about what you do…and what aspects would have a creative feeling to them for me? (Replace “creative” with another positive skill of the

position.)

Of all of the criteria you have outlined for this position, what are the top 3 in stack rank order?

The position we are discussing is something I am very excited about. Can you give me feedback on how I am meeting your qualifications and if I will proceed to the next level of

the hiring process? (This is called “going for the close” or “asking for the order” in sales.)

Tricks

1 LISTEN!!! When nervous, LISTEN harder. Well over 50% of the poor interview answers are because the candidate didn’t listen to the very basic question. This sabotages your entire interview because the hiring manager is going to have concerns that you won’t listen to their instructions on the job.

a. Check yourself to be sure you don’t have your own set of messages you want to blurt out. This will cause you to answer in a way that pushes your information versus what the interviewer asked for.

b. Sometimes the interviewer will repeat the question since you answered a different one. Only let that happen once, as they are giving you a break. LISTEN harder from now on.

c. If you don’t understand the question, ask, “Can you repeat the question and clarify please?”

2 “The Law of 3s”—For every question, both during your preparation AND during your interview, state no more than 3 things then stop. A full stop, not just a pause for breath. If the interviewer wants more, she will ask. If the silence becomes too awkward, you can ask, “Would you like more information?” Smile at the end of every question. Not a huge, silly smile, but grin as if you just hit the right note, crossed a finish line, or got an A on a quiz.

3 You will have a pen and paper open on the table during a face-to-face interview. In the far right or left margin, you can have short clues to some key interview questions and answers that you are nervous about remembering.

4 Scribble some words about the question down so you can peek at it and stay on track.

5 Pause after the question is asked and think. Feel free to scribble 3 words down that will be your 3 points. Then begin.

June 11, 2013

I'm a recent law school graduate who has spent the last year working for the federal government; in a few months, my job will end and I'll begin working for a corporate law firm. Along with the salary increase ($60k to $175k), I'll be getting a $50k bonus from my new firm for having spent the last year in the government position. My question for you and your readers is how to use the bonus, which after taxes will be $30-40k. Let me give you some background:

First, I have about $150k in law school debt. I haven't consolidated the loans yet because I'm in an income-based repayment program and consolidating would've negatively affected me for that purpose, but when I leave the government full repayment will kick in and I'll be making monthly payments of between $1500 and $2000. That's obviously a lot but manageable given my salary. The worst loan—by both principal and rate—is around $50k at 8%; the others are lesser in amount and rate.

Second, my wife has a trust in her name with around $150k in it that distributes fully upon her 35th birthday, which is two years from now. We plan on using the bulk/entirety of that for a down payment.

(Aside from the trust, which we can't get at yet, we have about $10-12k available cash, and no credit card debt/car payments.)

Third, we've recently discovered we're that expecting twins. This is awesome, but also complicating, as it will knock out my wife's salary for a while, possibly permanently. So the increase in my salary, while great in absolute terms, ends up being only about $50k more than our two current salaries combined.

So what do you think the best use of the bonus is? Should we use it entirely for my loans? I plan to consolidate the loans, but using the bonus to first pay down a big chunk of the loan with the worst terms could significantly improve the results of consolidation. Should we lump it in with the trust for a bigger down payment (which in all likelihood would not mean bigger house but instead smaller mortgage)? Should we keep it as cash on hand for unforeseeable but inevitable baby expenses? Split it up into, say, thirds, and put $10k toward each option? Some other option altogether that I'm overlooking?

June 08, 2013

Gold ownership has grown in popularity over the past five years. Fearful of monetary or societal failure, many hope that owning gold will bring them peace of mind. Advocates also suggest that some amount of gold is part of a balanced diversified portfolio. Arguments can be made for gold, but its investment properties are not among them. The optimum asset allocation to gold in an investment portfolio is zero.

Through an executive order, President Roosevelt made the possession of monetary gold a crime in 1933. Then in 1971, President Nixon took the United States off the gold standard. This move triggered a high rate of inflation that severely devalued the dollar. In 1974 private ownership of gold was allowed once again, but it could not be used as payment in contracts.

Now, we can both own and pay with gold, but another president could make it illegal again. Thus some people believe you should buy gold now before that happens.

Today, the U.S. dollar is only valuable because the government has declared it legal tender and we act accordingly. The dollar has no intrinsic value and is not backed by any reserves of gold or silver. It is a "fiat" currency. If a significant portion of society ever lost faith in its value, it would no longer be accepted despite government edict. We would experience hyperinflation, and the dollar's purchasing power would fall precipitously.

Historians cite examples of fiat currencies imploding after hyperinflation, making these worries a real concern. Since 2008 the U.S. government has been actively devaluing our currency. Holding interest rates low with quantitative easing has kept inflation higher than normal. Meanwhile the government has kept the official reports of inflation artificially low.

This situation engenders deep concern. The value of gold is heavily correlated to fears of economic or political collapse. It is argued that gold could protect us from such a catastrophe.

This position makes gold a fallback currency, not an investment. The argument against gold as an investment is twofold. First, gold has an expected return that is little more than inflation. Second, gold is extremely volatile.

Expected returns are calculated by analyzing long-term movements in price. Although gold's price is highly volatile, its value averages little more than the increase in inflation.

Jeremy Seigel's book "Stocks for the Long Run" includes the growth of $1 of various investments from 1802 through December 2006. After being adjusted for inflation, gold grew from $1 to $1.95 while stocks grew from $1 to $755,163. At those rates, stocks have an average annualized appreciation over inflation of 6.86%, whereas gold is just 0.33% over inflation.

Gold and silver generally hold their value. They appreciate approximately by inflation. Little or no additional value is added. But gold and silver also rise and fall with global fears. They can be very volatile, even when measured in inflation-adjusted dollars.

Although gold tends to hold its purchasing power, it has not done so for the past 33 years. In January 1980, gold reached a high of $850 an ounce ($2,399 in today's dollars). For the next 21 years the price of gold dropped to a low of $256, losing over 70% of its value. Since bottoming out in 2001, it has regained about half its value.

Gold’s volatility means it has both positive and negative runs. Gold advocates try to make their case based on the positive returns from the bottom of the gold market in 2001 until recently. They ignore the 21 years of decline in favor of the recent 12 years of growth. But any serious analysis for portfolio construction must look at long-term averages.

In 2013 gold is currently trading at $1,368.75. Adjusted for inflation, it has the same purchasing power as it did in 1979. For the past 34 years, gold has just kept up with the official figures for inflation, albeit gyrating wildly above and below the Consumer Price Index.

Long-term averages make gold look like a safe store of value. But if you purchased gold at its height in 1980, you have lost more than half your buying power. In contrast, stock investments since 1980 have increased their purchasing power more than fourfold.

Modern portfolio theory advocates blending asset classes to maximize expected return and minimize portfolio volatility. Portfolios constructed according to these specifications have their risk-return ratio on the "efficient frontier," a curve depicting the best possible risk-return combinations of asset allocations. Assets with low expected returns and high volatility are not part of the efficient frontier.

For any portfolio that includes an allocation to gold, there is a better portfolio, one with a higher expected return or a lower volatility that has a zero allocation to gold. The efficient frontier teaches us that the optimum allocation to lower performing, higher volatility investments is zero. Therefore, the optimum asset allocation to gold over long periods of time is zero.

Gold is not an investment. It is better described as a store of value. We use the term "investment" to describe something that pays you money. Stock ownership is an investment because it has earnings or at least the hope of future earnings. Bonds pay interest. Rental properties collect rent.

Using this definition means many items of value are not deemed investments. For example, a fur coat, original artwork, or comic book collection are not investments. Neither is a beach house reserved for private use. These items all have value. Some of them may even appreciate at a rate greater than inflation. But as a whole, they have an expected appreciation that is little more than inflation.

A wise rule is to opt only for investments. Gold is a safe store of value but not an investment. Cash isn't a safe store of value. When adjusting for inflation, $1 has dropped to just $0.06 in buying power over the last 200 years. Cash doesn't pay you money and is not an investment. The correct asset allocation to dollars is also zero.

Holding physical precious metals may be useful at times, but it is a mistake to purchase gold for its investment potential. The diversification of modern portfolio theory does not mean buying a little of everything. Rather it means finding the most efficient blend of assets to provide the best chance of meeting your long-term financial goals.

The optimum allocation to gold is always zero because its return is too low to be a real investment and its volatility is too high to justify its low return. If you choose to purchase gold, limiting it to less than 3% of your portfolio will protect you from compromising financial goals that depend on appreciation above inflation.

I found this chapter particularly interesting since it deals with the emerging and growing impact that social media has on job search. As all those looking for jobs try and figure out what works best in social media, I hope this excerpt helps.

True story: As a job search and career expert, I was skeptical about all of these social media tools as recently as four years ago. I separated professional networking from social networking and felt that the social sites were a waste of time. All of that was flawed. So, as a complete convert and now raving fan of social media for job search and career growth, here is a summary.

Job seekers can no longer ignore their online presence. Additionally, there are brand new ways to use Social Media to enhance and accelerate your job search. “Social recruiting” is evolving and improving rapidly, so jump in NOW, because the only way to learn about it is to do it. Manage your expectations, as well. Social media is simply another element of your job search “mix.” Social media connections are not a quick fix, but neither are job boards.

Benefits of Social Media to Job Seekers:

Be found. Social networking is simply preferred by recruiters and employers as a tool to acquire talent.

Identify and contact hiring managers.

Market and sell yourself and put yourself in front of many people.

Collect great research in preparation for an application or interview.

Social media enables you to develop a stronger network that can help you with your career as well as your next job search.

Benefits of Social Media to Hiring Managers and Recruiters: How many hiring managers browse social media profiles, and what type of information are they hunting?

A nationwide survey, which was conducted by Harris Interactive for CareerBuilder.com from February 9 to March 2, 2012 included more than 2,000 hiring managers and human resource professionals across industries and company sizes. 37% use social networking sites to research job candidates.

What are hiring managers looking for on social media? Hiring managers are using social media to evaluate candidates’ character and personality outside the confines of the traditional interview process. When asked why they use social networks to conduct background research, hiring managers stated the following:

65%—To see if the candidate presents himself/herself

51%—To see if the candidate is a good fit for the company culture

45%—To learn more about the candidate’s qualifications

35%—To see if the candidate is well-rounded

12%—To look for reasons not to hire the candidate

Is social media helping or hurting job candidates? A third (34%) of hiring managers who currently research candidates via social media said they have found information that has caused them not to hire a candidate. That content ranges from evidence of inappropriate behavior to information that contradicted their listed qualifications:

Employers are also looking for information that could potentially give a job seeker an advantage. 3 in 10 hiring managers (29%) said they have found something that caused them to hire a candidate, citing content that showed them the following:

58%—Good feel for candidate’s personality

55%—Conveyed a professional image

54%—Background information supported professional qualifications

51%—Well-rounded, showed a wide range of interests

49%—Great communication skills

44%—Candidate was creative

34%—Other people posted great references about the candidate

Where are employers going to research job candidates?

65% are going to Facebook

63% are going to LinkedIn

16% to Twitter

17% to “other”

However, research by JobVite.com uncovers that the increase in social media use for recruiting is a direct result of the number of quality candidates seen from social channels. The Jobvite Social Recruiting Survey 2012 was conducted online between May and June 2012. Over 1,000 people across the globe completed the survey in response to an email invitation sent to a registered list of human resources and recruiting professionals.

92% of respondents use or plan to use social media for recruiting, an increase of almost ten percent from the 83% using social recruiting in 2010.

73% have successfully hired a candidate through social networks, making social recruiting a highly effective source of quality new hires.

A large majority of recruiters (71%) consider themselves savvy in social recruiting, having a sizeable understanding of what to look for in social profiles.

49% of recruiters who implemented social recruiting saw an increase in the quantity of candidates, and 43% noted a surge in the quality of candidates.

89% have made a hire through LinkedIn, 26% through Facebook, and 15% through Twitter.

86% of recruiters are likely to look at social profiles, and poor spelling and profanity make a bad impression to a majority of recruiters.

The following are the top three most important tools within social media that you need to have completed to compete in today’s new era of job search (and why each is important):

LinkedIn - Visibility, company job postings, research. If you are not here, you don’t exist for many recruiters and hiring companies.

A. LinkedIn—LinkedIn offers the broadest array of resources to further your career. Whether you are looking for your first job, are considering changing careers, or want to move into a more senior position, LinkedIn can help you achieve it. How?

Finding companies that hire people like you: Search using your own skills as the keywords and specify your geography.

Finding work at a specific company: You can become instantly updated when a job opening comes up at one of your target companies. Search within your own network, as well as browsing your contact’s network.

Develop human resources, recruiting, and hiring manager contacts.

Advanced search features will save you time and deliver the best information to you.

B. Twitter—Twitter gives you free information about people, organizations, and job listings. You can be an observant follower and still reap many benefits.

Start to Follow People and Organizations: Following someone on Twitter simply means receiving their posts, which are called “tweets.” Every time the person posts a new message, it appears on your homepage in real time. To start the process, use the search function to find people or organizations you want to follow. Once you find them, click on the “Follow” button and you will begin instantly receiving their updates. The best part about Twitter is that you don’t need to get the person’s permission. Anyone on Twitter can follow any person or organization. As an example, follow me by typing my name in the search bar and clicking “Follow.”

Follow People and Organizations: Begin by following organizations you are interested in pursuing. Next, follow employees in your target companies. The information you receive will be valuable in helping you research the culture and mission of an organization.

Job Listings: An easy way to search for openings is to use the hash tag sign, or what some people refer to as the pound sign, which is the # symbol. The hash tag is Twitter’s filing system. For example, if you search #Seattle and #jobs, you will find tweets for openings in Seattle.

C. Facebook—One of the reasons Facebook is important as a job search tool is because every business and brand that knows the power of the web is already there. Recruitersare also scouring Facebook for candidates.

Search: When you search for a particular term on Facebook, you can narrow it down to people, pages, groups, links, etc., which gives you wide range of options as to who to network with and reach out to. For instance, if you are looking for jobs related to “architecture,” you can simply search for that term and connect with people in that particular field. You can search for people who are architects, join groups and pages, or simply find links that have the term “architecture” in them. This allows you to connect with like-minded people and build a relationship with them, which can help you find a job later.

Facebook Pages and Groups: These features allow you to join a group of people with similar interests, provide an opportunity for you to learn more about a company, and connect with recruiters via Facebook. The first rule of job hunting is to let others know that you are available.

Facebook Applications: There are some really good applications for job hunters on Facebook that allow you to get more out of Facebook and other job search sites. Log in to Facebook, click on “Profile,” type the application name in the search box, then follow the instructions to install. Or, visit the Facebook Application Directory and search using “job search,” “career,” or “jobs” as keywords. You will find BeKnown, BranchOut, CareerBuilder Facebook App, CareerFriend Facebook App, Hire My Friend, and more.

Facebook Pages: Many organizations use Facebook Pages to promote their brands to potential candidates. Not only do they post open jobs there, but these pages are often maintained by various members of their recruiting organization.

Tricks

1 LinkedIn Tricks

Apply the principles of Search Engine Optimization (SEO) or keywords.

Use first-person and your credentials will be more exciting than a résumé.

Focus on the last 10-15 years.

Assure “Contact Settings” are working to your advantage.

Adjust your “Settings/Privacy Controls” so not everybody has to see every time you build a new relationship or connect with a recruiter.

Set a “LinkedIn time” an hour a week or more. Make connections, research.

Follow target companies and connect with employees. Click the “Follow” button and, on a weekly basis, monitor their updates. Many companies also have a separate tab that says “Careers” or “Employee Insights,” both of which are very helpful in terms of finding recruitment contacts and hearing more information about hiring at that company. Many even post the actual job listings.

Begin your involvement with a LinkedIn Group by commenting constructively on a discussion topic. Or start a discussion if you need help.

Pay attention to LinkedIn Group members. Don’t be shy to click on the profiles of people who contribute. They might turn out to be new connections for you, for info interviews or maybe more.

2 Twitter Tricks

Tweetdeck.com easily organizes your hash tags and searches into one console that you personalize. This is the website I open up every morning.

Twellow.com searches people’s bios and URLs on their bios. For example, if you do a search on <your target company>, a company you would love to work for, then you can see how many of their employees are on Twitter.

3 Facebook Tricks

If you wouldn’t say something in front of a crowd of 300 million in the real world, you should not to do it online either.

Narrow down as much as possible based on your field of expertise. If you are an architect, you can use the search feature to find pages and groups that are created for architects.

If unemployed, frequently post status updates relating to your job search to keep it top of mind that you are still looking for a job. Say things like, “I had a great interview this morning... keep your fingers crossed!” or, “I have a networking meeting later today with a company I’m really interested in!”

June 04, 2013

The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.

If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.

Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit.

Next in the series is FMF reader CT. He answered my questions (in red below) as follows:

Please tell us a bit about yourself.

My wife and I are in our early thirties (32 and 33), have been married for almost 8 years, and have a 2-year old daughter. I’m a mechanical engineer currently working at a power plant. My wife is a licensed CPA, but currently stays at home with our daughter. We currently live in a small (low cost of living) town south of Houston, Texas. We both grew up in this area and have majority of both families within an hour drive. Close vicinity to family was the main reason we chose to move back after starting our careers in Houston.

Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).

My income is stable, but total compensation can fluctuate a little due to overtime and annual bonus. Current total compensation typically ranges from $125k to $140k. The 401(k) match is 8.1%, is tier structured based on years of service, and tops out of 12.1%. I’m maxing out to the $17,500 limit for 2013.

After paycheck deductions, my take home pay averages $6700 per month.

We are currently living in a small wood frame house that my wife’s father and grandfather built many years ago. My wife is set to inherit the house and land, so we’re making payments to her parents so that it isn’t money out of their pocket to let us stay there (home insurance, property taxes, etc.). My wife’s father doesn’t want to rent the place plus he gets free manual labor out of the deal (hauling hay, mowing pastures, mending fence, etc.). The plan is to add on a room or two down the road (two or three years) and provide maintenance/improvements as necessary. We are truly blessed to be in this situation. It’s very sentimental to my wife, and I like taking on home improvement projects.

When my wife did work, we made it a priority to max out our 401k’s and max out our Roth IRA’s. We still have this mentality today.

The financial numbers below are averages:

Expenses

Rent/Property Taxes/Insurance: $260

Utilities (electricity, trash, etc.): $175

Communication (cable, internet, phone): $240

Groceries: $350

Dining out / Entertainment: $130

Gas / Transportation (includes maintenance): $600

Car Insurance: $175

Life and Disability Insurance: $160

Medical (doctor visits, medication, etc.): $130

Charitable Contributions: $300

Pets: $170

Roth IRA’s: $916

Other (clothes, toddler stuff, consumables, etc.): $1000

Supplemental Savings

Savings Goal: $2000

Assets

Land, Cattle, Farm Equipment: $130000

Vehicles: $30000

Retirement, Medical, and Investment Accounts

401k’s: $152000

Roth IRA’s: $147000

Traditional IRA’s: $129000

Joint Brokerage: $6600

HSA: $24000

Liquid Accounts

Checking: $12000

Savings: $31000

Emergency Savings: $20000

Debt

NONE (hope to keep it that way)

What are the current financial issues you're facing (saving, paying off debt, etc.)?

Starting with the positive, my wife and I worked hard and stuck to our plan early in our marriage and careers. We’ve been contributing the max to our 401k’s and Roth IRA’s since 2005 (with exception of my wife’s 401k when she resigned in late 2010). In addition, we put our excess income toward paying down the principal on our first home. When we sold it in 2011, we were able to pay cash for some land adjacent to the place we are living on now. We took my father-in-law’s advice and also purchased a starter herd of cattle (he’s been in the cattle business for about 15 years). I did not include farm/agricultural income because we’ve broken even the last two years. With the recent years of drought here in Texas, cattle prices are high and diesel is still climbing…so adding to our herd or buying more pasture land will be a slow process purely for economic reasons.

Over the years, we have learned that saving the money is a strength of ours. However, I’m not sure we are optimizing the ways our money can work for us and continually grow.

I manage our portfolio because my wife (CPA remember) is very good at taxes and bookkeeping, but shows very little interest in the investing side. I follow a few financial blogs and have read numerous books to further educate myself, but I find myself sometimes emotionally reacting to market fluctuations and news speculation (I know…not a good thing). I’m familiar with index fund investing, buy and hold vs. allocation moves based on bull/bear markets, and various methodologies (dollar cost averaging, lump sum investing, value averaging, etc), but sometimes I feel overwhelmed (especially as our portfolio gets bigger and bad decisions have potential to hurt more). 100% of our investment portfolio is with Vanguard. I would love some pointers on various strategies to grow our nest egg over the long haul. I’d even be willing to learn and try a combination of strategies for further diversification. I believe I’m capable of understanding such concepts, but I need exposure to those who have the experience and knowledge of where to start, what to look for, possible tools to utilize, and how to stay on path. I understand that time is on our side, and we can take on more risk, but a well-defined and thought-out plan would help me not second guess those decisions.

should we convert some of the traditional IRA to Roth IRA or vice versa?

529 vs ESA for college savings?

Our daughter is still young, but we would like to start saving for her college. It’s really something that just came up in one of our conversations two weeks ago after attending a Dave Ramsey lecture.

As I mentioned before, we will be taking on some home improvement projects in the next couple of years. These will be paid out of pocket as funding and schedule permits.

We have three paid-off vehicles (2000 Civic as work car, 2003 pickup for farm usage, and 2006 SUV for my wife). As they get older and mileage accumulates, I’m sure we’ll be forced to replace at least the car or SUV in the near future.

We are currently building up the Savings account for the home improvements and potential vehicle replacement. The ultimate goal is to try our best to minimize debt as best as possible.

What are your plans for the future (retire early, build your career, etc.)?

I know for sure that I will continue to advance my career by gaining experience in the power generation industry with focus on equipment reliability, outage planning and execution, and machinery (steam turbines, gas turbines, pumps, etc.) troubleshooting and diagnosis. I’d like to see myself reach a point where I can retire and consult on a part time basis. A few years back, I earned my MBA and became a licensed Professional Engineer, so hopefully I can utilize these once I get several years os experience under my belt. Honestly, I don’t ever see myself ever not working. I just prefer to be in the position where I can work on my own terms.

We’d like to purchase more land and expand our farm business such that it provides some supplemental income, but the ultimate goal is to provide a source for home grown food (beef, chicken eggs, venison, vegetables, fruit, etc.).

Obviously, we have a daughter to raise, send off to college, and marry away someday.

My wife may decide to take on a few clients for tax preparation and bookkeeping services, but that’s not in the nest egg accumulation plan for now. This way, anything she does can be put back toward college or our daughter’s wedding or just makes us reach our financial goals quicker.

In the near future, we’d like to look for opportunities to give back to our local community and broaden our charitable work.

June 01, 2013

My wife and I are buying our first home and our mortgage payment is going to end up being right around $850 a month give or take a few dollars. This is under our budget of $1000 per month that we were are willing to spend. We will only be putting 10% down so we will have some mortgage insurance as a part of that payment. We currently have no debt other debt outside our monthly credit card balance that we pay off in full every month. My question is this:

Would you recommend that...

we pay our full budgeted amount of $1000 per month towards our mortgage?

OR

we make the minimum payment of $850 and then invest the $150 we have left over in a mutual fund?

OR

is there another option out there besides either of these two I should be considering?

It may also be helpful to know that my brother just started with Edward Jones so any investment I make through him into a mutual fund I do not have to pay the sales charge that is normally 5.75%.